Course Content (course 9:15am-5pm):
In all of Property Overview’s courses an experienced and friendly practitioner can add real value as we are able to combine theory and practice and show real-life examples to bring the subject matter to life.
Property, and debt in particular, is full of terminology and processes that can seem frankly bewildering. Jonathan, a seasoned real estate debt veteran, will bring unbiased clarity and insight. His practical approach helps each attendee bed down theory in an engaging, efficient manner.
Whether you work for a lender, borrower or service provider, the content and context provided by this 1-day course will help the attendee in business discussions and decision making. Some basic understanding of the property market is a prerequisite.
The supply and use of debt in real estate investment
- Motivation to provide debt by lenders; how real estate debt compares
- Drivers of property cycles
- ….and how volatility impacts LTVs, lending volumes, profitability, debt covenants and other lending aspects
- Types of debt in use across real estate
- What impact interest rates and debt margins – in general and per type
- Why borrow?
- How much, what way, for how long, at what cost?
- How risky? How does it magnify returns and losses?
- The sectors
- What are they and what is their appeal
- How has their appeal changed since the GFC and how has their appeal changed due to COVID-19. What are key considerations?
- ESG: environmental, social and governance considerations
- Proptech – the future is digital?
Private Commercial Real Estate debt and its place in the 4 quadrants
- Private and Public debt market instruments
Who do you borrow from? The change in debt capital sources and market players
- What are the characteristic of the debt markets (senior, mezz and quasi equity)
- How has this changed since the GFC – the rise of the unregulated lenders
- Who can offer what type of debt
- What else can investors do?
How does the capital structure and risk profile differ?
What is the art of the possible/what are the constraints
Risk, return & leverage
- Borrowers: capital structure, mezzanine finance, leveraged appraisal
- 4 Quadrant investment, debt & performance
Negotiating the term sheet
Risk assessment of property debt, including underwriting & credit risk
What is your exit
Final pieces of essential jargon, discussion on covenants, ratios, calculations
Case study game – compare and contrast real-life cases in your group and apply all that you have learned. This helps translate theory into practice
Taught by Jonathan Monninkendam, a senior, friendly and approachable practitioner